Greenhouse gas accounting for investment portfolios: quantifying financed emissions at a public research university

As the urgency of climate change grows, higher education institutions are increasingly accounting for, and reporting, their annual greenhouse gas (GHG) emissions. An often-overlooked source of GHG emissions are those associated with loans and investments. The purpose of this work is to quantify financed emissions from investment holdings in a public research university endowment, using Northern Arizona University (NAU) as a case study. The methodology for calculating financed emissions is drawn from the Partnership for Carbon Accounting Financials (PCAF), which describes how to attribute GHG emissions from investee companies to the investor on an annual basis. Financed emissions from NAU’s endowment are estimated to be a substantial component of NAU’s GHG inventory, highlighting the significance of this emissions category for public research universities with endowments. The results are presented for individual investee companies and discussed as an indicator of climate-related financial risk. Further, the results show that the divestment of fossil fuel companies from NAU’s endowment would lead to a 22% reduction in financed emissions.